Judge rejects backdating case against former Broadcom executives
Judge Cormac Carney dismissed all the charges against two defendants in the Broadcom backdating case due to “shameful prosecutorial misconduct and a lack of evidence”. Chief Financial Officer William Ruehle, as well as CEO Henry Nicholas III, were acquitted of charges.
Evidence in the securities case provided that prosecutors tried to influence the testimony of three witnesses, improperly contacted witnesses attorneys and leaked information about grand jury proceedings to the media.
Judge Carney stated that the government improperly influenced three witnesses who were critical to Ruehle’s defense and that the effect of the misconduct distorted the truth finding process”. The same witnesses were been necessary to prove Nicholas’s defense. If Carney were to submit the case to the jury, it would make a mockery of the constitutional right to due process and fair trial.
Broadcom started in 1991 and took public only 7 years later. It grew to 7,000 employees worldwide and is the lead manufacturer for the chips used in everything from cell phones to cable boxes. Last year it had nearly $5 billion in revenue.
In 2006, federal authorities began investigating stock options granted by hundreds of companies, including Broadcom. While many companies have settled with the SEC, criminal cases are much less common and have had trouble sticking. For example, former CEO of Brocade was ordered a new trial due to prosecutorial misconduct. McAfee’s former general counsel was acquitted on similar charges earlier this year. KB Homes former CEO is set to go on trial in February on charges regarding stock options.
Henry Samueli, co founder and CEO of Broadcom, was exonerated after being charged with a single count of lying to the SEC. Judge Carney stated (in regards to Samueli), ”The government embarked on a campaign of humiliation and other misconduct to embarrass him and bring him down.” Samueli, a billionaire philanthropist and also owner of the NHL’s Anaheim Ducks, said Carney’s ruling had restored his faith in the judicial system.
Legal experts following the case said the judge’s actions were astonishing and showed he was deeply disturbed by the government’s alleged misconduct.
By Gillian Flaccus
SANTA ANA — A federal judge Tuesday dismissed all charges against the remaining two defendants in the government’s sweeping securities fraud case against chip maker Broadcom, citing what he called “shameful” prosecutorial misconduct and a lack of evidence.
The judge’s reaction was definitely astonishing and in my opinion the right one. Someone needs to hold the government at a higher standard.
Just another example of the US government trying to take advantage of a decent citizen. What’s with all these witch hunts lately??
Thank God for the Judge’s ruling or else it would definitely have made a “mockery” of the constitutional right.
“Legal experts following the case said the judge’s actions were astonishing”? Why is it so astonishing that he put the prosecutors in their place, called them out, told them they were wrong and dismissed the case. That doesn’t seem so astonishing to me, it just seems like the right thing to do.
“Lack of evidence”, exactly. Why are these prosecutors going after any of these CEOs for backdating; no evidence, not illegal. It is a waste of time.
It seems that there is a lack of evidence in every backdating case…. Sure they are able to prove backdating happened throughout these companies, but that is not illegal. Therefor the prosecutors are needing to prove fraud which has not been found… Sorry prosecution, but you need to put this backdating issue to rest.